All of the following can be associated with a high trade deficit except a. developing countries b. a drop in prices in order to pay for imports c. more manufactured goods are imported than raw materials are exported d. possible inflation

All of the following can be associated with a high trade deficit EXCEPT developing countries.

A.

for starters, there is the structural trend of rising primary government expenditure as a share of gdp, which reached 36% in 2014, up from 22% in 1991. this increase reflected a political desire to address the poverty and inequality that had gone unaddressed during previous decades. to support the increase, brazil’s government increased taxes on consumption and promoted progress toward labor-market formalization. nonetheless, public investment, particularly in infrastructure, took a hit. in fact, with the exception of the 2005-2008 period, total investment as a share of gdp has remained below 20% since 1991.